2. The market for gas is perfectly competitive with identical firms. Market demand is downward sloping. Each firm has the typical cost curve shapes. The market is currently in long-run and short-run equilibrium. To help themselves in the upcoming elections, the government imposes a per-unit subsidy of $1 on gas. The subsidy is paid to consumers. 2a). What is the short-run impact of the subsidy on (1) Market price, (2) Market quantity, (3) Firm Quantity and (4) Number of firms in the gas market. Complete the diagrams below to show the Short-run impact on the market and the firms. (Draw the graph and label it) MARKET FIRM Q Q 2b). What is the long-run impact of the subsidy on (1) Market price, (2) Market quantity, (3) Firm Quantity and (4) Number of firms in the gas market. Complete the diagrams below to show the Short-run impact on the market and the firms. (Draw the graph and label it) MARKET FIRM3A). Consider a perfectly competitive market. Right now we have two types of firms. Firms using technology A and firms using technology B. There are 10 firms of type A and 20 firms of type B. The Marginal Cost function for firms with technology A is given by MCA(qA) = 5 + 2qA . In addition, these firms have to pay a fixed cost of $64. The Marginal Cost function for firms with technology B is given by MCB(qB) = 10 + qg. In addition, these firms have to pay a fixed cost of $50. What is the short run supply curve for each type of firm? 3B) What is the Market Supply curve 3C) Suppose that Market price is $15. How much does each type of firm supply? 3D). Suppose that Market price is $25. What is Marginal Cost of the last unit supplied for each type of firm?\fMarket Cost 100 0 90 80 70 60 cost ( with subsidy) 50 40 30 20 10 0 0 100 200 300 400 500 quantityMarket Cost 100 Q 90 80 70 60 cost ( without subsidy) 50 40 30 20 10 0 0 100 200 300 400 500 quantity\fMy Chart 125 100 100 80 75 70 65 63 62 50 25 0 0 100 200 300 400 500 Photoadking.com